propounded in the application manifestly had reference to some business or employment calculated to interfere with Strong's duty to the bank or to increase the risk. It had no reference to the trivial or incidental duties of some other business or employment which did not impose a tax upon the time due the bank or call for the investment of some capital. The other engagements of Strong were too trivial and unimportant to be deemed to have been in contemplation of the parties when the truth of the answers were warranted.

Upon consideration of the whole case, we are of the opinion that the proof does not establish any grounds of forfeiture or breach of warranties or conditions on the part of the assured, and that the appellant is liable for the defalcation which occurred during the period of the last renewal, to the extent of the amount of penalty of the bond. Those occurring during the preceding periods need not be discussed.

The decree is therefore reversed, and a decree will be entered 57 here against appellant for the sum of $5,000, with interest from August 21, 1903, together with the costs of the court below.

It is so ordered.

Fidelity Insurance is discussed in the note to First Nat. Bank v. Fidelity and Guaranty Co., 100 Am. St. Rep. 774. A statute declaring that no misrepresentation or warranty by an insured shall be deemed material or affect the contract of insurance, unless made with an intent to deceive, or unless the matter represented increases the risk, applies to fidelity insurance contracts: First Nat. Bank v. Fidelity and Guaranty Co., 110 Tenn. 10, 100 Am. St. Rep. 765; Champion Ice etc. Co. v. American Bonding etc. Co., 115 Ky. 863, 103 Am. St. Rep. 356.

When a Bond Guaranteeing the Fidelity of an Employé is renewed, there is still only one contract and one penalty, the renewal certificate being a new bond only in extending the indemnity provided by the original bond to a new period of time: First Nat. Bank v. Fidelity and Guaranty Co., 110 Tenn. 10, 100 Am. St. Rep. 765.

EOFF v. KENNEFICK-HAMMOND COMPANY.

[80 Ark. 138, 96 S. W. 986.]

TAXATION.-The Personal Property of a Nonresident while in use in this state in the construction of a railroad is here subject to taxation. (p. 84.)

G. J. Cramp and Garner Fraser, for the appellant.

Pace & Pace, for the appellees.

139 BATTLE, J. The assessor of Boone county listed and assessed for taxation for 1903 the following property of Kennefick-Hammond Company: Fourteen horses, eighty-eight mules, seventy-five wagons, seventeen boilers, two light plants, two air compressors, harness and blacksmith tools, valuing the boilers, light plants, air compressors, harness and blacksmith tools, in the aggregate, at twenty thousand six hundred and seventy dollars. This property was situated in Boone county on the first Monday in June, 1903; how long before and how long after does not appear. It was used by Kennefick-Hammond Company in the construction of a roadbed for a railroad through a portion of Boone county, about fifteen miles in length. How long it required to complete the roadbed was not shown at the hearing of this cause. The taxes of 1903 were levied upon it, and the collector of Boone county was proceeding to collect the same when he was restrained from so doing by an order made by the chancellor of the Boone chancery court, upon application of Kennefick-Hammond Company, which was afterward made perpetual by the court. Kennefick-Hammond Company was a partnership composed of William Kennefick and F. S. Hammond, and they were citizens and residents of the state of Missouri before, on and after the first Monday in June, 1903.

In Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. Rep. 876, 35 L. ed. 613, Mr. Justice Gray, speaking for the court, said: "No general principles of law are better settled, or more fundamental, than that the legislative power of every state extends to all property within its borders, and that only so far as the comity of that state allows can such property be affected by the law of any other 140 state. The old rule, expressed in the maxim, 'Mobilia sequuntur personam,' by which personal property was regarded as sub

ject to the law of the owner's domicile, grew up in the Middle Ages, when movable property consisted chiefly of gold and jewels, which could be easily carried by the owner from place to place, or secreted in spots known only to himself. In modern times, since the great increase in amount and variety of personal property not immediately connected with the person of the owner, that rule has yielded more and more to the lex situs, the law of the place where the property is kept and used. For the purposes of taxation, as has been repeatedly affirmed by this court, personal property may be separated from its owner; and may be taxed on its account, at the place where it is although not the place of his own domicile, and even if he is not a citizen or resident of the state which imposes the tax.'

And

The statutes of this state provide that "all property, whether real or personal, in this state. . . . shall be subject to taxation," except property exempted by the constitution, of which the property in question is not a part. Personal property must be assessed in the name of the person who was the owner on the first Monday in June in the year in which the assessment was made: Kirby's Digest, secs. 6873, 6913. in all cases in which it is necessary for the assessor, "in consequence of the sickness or absence of the person whose duty it is to make out a statement of personal property" or his refusal to do so, "to ascertain the several items and the value thereof," the assessor may do so and make return thereof from the best information he can get: Kirby's Digest, secs. 6966, 6968.

But plaintiffs insist that the property was in the state, at the time it was assessed, temporarily; that it had not been incorporated in and become a part of the property of the state; had not gained a situs here, but was in transitu, and not subject to taxation in this state. Tangible personal property of a nonresident in transit is not subject to local taxation in the state in which it may be temporarily. But when does property cease to be in transit and become of such permanency as will justify taxation in its new situs? It cannot always be in transit.

In Kelley v. Rhoads, 7 Wyo. 237, 75 Am. St. Rep. 904, 51 Pac. 593, 39 L. R. A. 594, the "plaintiff, who was a resident and citizen of the state of Kansas, was the owner of 141 certain sheep, numbering about ten thousand head, which, on or

about October 29, 1895, were in the county of Laramie, in the state of Wyoming, in charge of an agent, who was driving and transporting them through the state of Wyoming from Utah to Nebraska. In driving the sheep it was the practice to permit them to spread out at times in the neighorhbood of a quarter of a mile, and while being so driven to graze over land of that width," and they were maintained solely in that way. They were driven across Wyoming for the purpose of shipment, and were not brought into the state for the purpose of being maintained permanently therein. The time consumed in driving the sheep through Wyoming was from six to eight weeks, and the distance traveled was about five hundred miles. "For shipment purposes, it was not necessary that the sheep should be driven into Wyoming, and the railroad over which they were shipped could be reached from the point from which they were first driven by traveling a less distance than was required to drive them to any point" in Wyoming. The question was, Were the sheep subject to taxation while in Wyoming? The supreme court of Wyoming held that they were. The court said: "We are of the opinion, therefore, that in determining the purpose and the situs, the course and method of travel is a proper subject, and one of the elements for consideration. We do not dispute the proposition that an owner of livestock, if not otherwise disobedient to the law, and observant of the police regulations of the state, has the right to transport them to market by driving on foot as well as by rail. Strictly speaking, they will be in transit by the one method as much as by the other. If, however, the purpose of such owner is not alone that of transportation, but comprehends also that of grazing and feeding them upon the natural grasses, which is their natural source of sustenance, not as a mere necessary incident of the travel, but as one of the purposes of such movement, they would not come within the rule which exempts personal property in transit from taxation."

This case, Kelley v. Rhoads, was taken to the supreme court of the United States, and the judgment therein was reversed on the ground that the sheep were property engaged in interstate commerce: Kelley v. Rhoads, 188 U. S. 1, 23 Sup. Ct. Rep. 259, 47 L. ed. 359. The supreme court of the United States said: "The question to be determined, then, is whether the stock of the plaintiff was brought into the Am. St. Rep., Vol. 117-6

state 142 for the purpose of being grazed at the time it was assessed for taxation. . . . Had the state court found directly the ultimate fact that these sheep were brought into the state for the purpose of being grazed, such finding might have bound us, but, under the facts actually found or agreed upon, we are at liberty to inquire whether they support the judgment.

"The law upon this subject, so far as it concerns interference with interstate commerce, is settled by several cases in this court, which hold that property actually in transit is exempt from local taxation, although, if it be stored for an indefinite time during such transit, at least for other than natural causes or lack of facilities for immediate transportation, it may be lawfully assessed by the local authorities."

Again it says: "The question turns upon the purpose for which the sheep were driven into the state. If for the purpose of being grazed, they are expressly within the first section of the act (that is, subject to taxation in Wyoming). But if for the purpose of being driven through the state to a market, they would be exempt as a subject of interstate commerce, though they might incidentally have supported themselves in grazing while actually in transit.

After repeating a part of the facts, it says: "It thus appears that the only purpose found for which this herd of sheep was being driven across the state was for shipment, and the agreed statement (of facts) wholly fails to show that they were detained at any place within the state for the purpose of grazing or otherwise. As they consumed from six to eight weeks in traveling abut five hundred miles, or, as the supreme court found, at the rate of about nine miles per day, it does not even appear that they loitered unnecessarily on the way. As they required sustenance on the journey, and could obtain it only by grazing, it would appear, though there is no testimony upon that point, that they could hardly have been driven more rapidly without a loss of flesh during the transit."

The doctrine of the Wyoming court is not questioned by the supreme court of the United States, but the difference of the two courts is in its application to the facts in the case. As interpreted by the latter court, it is applicable, and should control in the case before us.